The U.S. stock market partially recovered in the last two days from the worst sell-off of the year. The sell-off was caused by turmoil in Washington, which centered around accusations of president Trump obstructing justice.
The chart below shows that the sharp drop of the S&P 500 index occurred on high volume, which was the reflection of panic amongst disoriented investors:
After the rebound, the weakest sectors, which include energy, banking, and transportation, continued to stay weak. On the other hand, the strongest sectors were not impacted much:
We used the technical screen provided by Fidelity Sector Report to identify the safest sectors to invest in after the market sell-off.
The criteria for the screen included strong long-term and short-term price trends, and improving relative strength compared to the S&P 500 index.
The top 5 sector funds are:
- Fidelity Select Technology Fund (FSPTX)
- Fidelity Select Leisure Fund (FDLSX)
- Fidelity Select Wireless Communications Fund (FWRLX)
- Fidelity Select Environments Services Fund (FSLEX)
- Fidelity Select Consumer Staples Fund (FSDAX)
Here are the charts for the top sector funds: